Maryland fines attorney for loan modification business

Homeowners claim Md. company took modification money, disappeared

Struggling homeowners across the U.S. said a Maryland company promised to help save their homes, but after the business took their money, it disappeared.

James Valente, 45, a Long Island, N.Y., homeowner, still keeps a document he once thought would help him keep his home.

"This house is all I have left. I just don't want to lose it," he told 11 News reporter Barry Simms.

Now he thinks it's worthless paper. He said the help he sought from a Maryland company called American Home Relief Foundation never arrived, and the attorney he thought would represent him didn't.

"I was looking for them to help me out because I'm having problems. I can't deal with it anymore. It's too stressful," he told Simms. Valente said once he filled out the paperwork and sent in his money, he got the runaround.

"That's when I basically snapped. I thought I had lost everything. I called my mother and said, 'Mom, I'm in trouble,'" he said.

So were other homeowners, Simms reported, from as far away as Washington state and New York. Dozens contacted the Better Business Bureau complaining about American Home Relief Foundation.

Valente claimed he paid $1,995 for a loan modification.

"There was supposed to be four people on my case, and Mike Perry was the head of the group," he told Simms.

Valente said he was never able to reach attorney Michael A. Perry, but Simms was able to reach him by leaving a note at his Rockville home. Perry later called and agreed to meet with 11 News at his Catonsville office.

Perry, a Virginia attorney, called himself a minority investor in American Home Relief. He owned one-third of the business.

"I understand why some people would get mad because they see my name, and there's nobody else to go to," he told Simms.

"You had no idea the people who were working for American Home Relief were telling homeowners that you would be their attorney?" Simms questioned.

Perry responded, "I had no idea."

Former employees unhappy, too

Perry's name appears on the contracts homeowners received and also in the scripts used by salespeople who the company called modification specialists, Simms reported.

"We are a private attorney-based document preparation firm founded by real estate attorney Michael A. Perry," said one script, according to former employee James Collins.

Collins and another former employee, Frank Chester, said they became worried when they found out the company was charging up-front fees to struggling homeowners in states where it was illegal.

"If they're doing something illegal, they're going to shut us down and put us all in jail," Chester said.

"They used my good name to sign up people that are losing their homes, and I'm not going to stand for it," Collins said.

He said Perry was in the office several times a month and that homeowners were told Perry was their attorney. But Perry claimed he didn't find out about it until homeowners started contacting him.

"So what did you do at that point?" Simms asked.

Perry responded, "What I did was I came in and started to look at the materials and asked, 'What's going on?' That's when I found out that they were portraying me like I was a part of their business, or that they were part of my law practice, which was never the case."

Maryland takes notice

Perry said he closed American Home Relief Foundation in January 2011. Two months later, his law firm, Perry and Associates, was in the same business, Simms reported. Hundreds of signs popped up along Maryland roadways, and that's when the state of Maryland started taking notice.

"The signs were misleading, offering 2 percent loan modifications with guaranteed success rates," said Anne Balcer Norton, the deputy commissioner of the Maryland Department of Labor, Licensing and Regulation.

"Yes, nobody liked the signs," Perry admitted. "The signs are legal."

"He was running a loan modification operation called a law firm," Norton said.

The state issued a cease and desist order in March and fined Perry and Associates nearly $500,000 because the business was unlicensed and was charging illegal up-front fees. Perry is challenging the state's findings. He said he believes his law firm is exempt and that the law requires a license for credit repair, not loan modifications.

"Not one Maryland resident has complained about what we've done. This is strictly about whether a license is required," Perry told 11 News.

As for American Home Relief Foundation, in November, New Hampshire also issued a cease and desist order, although the business had already closed, Simms reported. The alleged violations were that it was operating without a mortgage broker license and charging illegal up-front fees.

"My father convinced me to buy (a home) and put my money somewhere," said Valente, who is still struggling to keep his home. He said he still believes Perry was his attorney. He said he wants his money back but doesn't think it will happen.

Meanwhile, Perry has taken his case to the Circuit Court in Baltimore. He is asking for a judicial review of the state of Maryland's findings.

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